To work out holiday pay for an employee you need two key pieces of information:
The employee’s holiday entitlement for the year – this is usually 5.6 weeks per year, which works out to 28 days an employee who works 5 days per week.
- For part-time workers, the employee is entitled to 5.6 x the number of days in your normal working week. For example, if they work two days a week they’d be entitled to 11.2 days' leave a year.
- For workers with irregular hours, it can be easier to calculate their accumulated holiday entitlement as hours are worked. The holiday entitlement of 5.6 weeks is equivalent to 12.07% of hours worked. So if you work 10 hours, you’re entitled to 72.6 minutes paid holiday (12.07% x 10 hours = 1.21 hours = 72.6 minutes)
Details of the dates of the business’s holiday year – this may mirror the calendar year, but it could equally run from April to March, or September to August. The length of the months in question will affect the amount of working days in the holiday year.
Once you have the right information, you can work out their holiday pay.
- Look at the holiday dates that have been requested.
- Work out (based on the holiday year) which days would have been working days.
- Tally up the number of holiday days they’ll get paid for, based on their entitlement.
- Multiply that number of days by their daily pay rate and plug it into your payroll system.
- Your employee gets paid their normal salary, and clocks up days taken from their holiday entitlement.
It’s not compulsory to record these holidays days in your payroll system, but you will need a record in your systems of each employee’s holiday entitlement, what holiday they’ve taken and how many holiday days they have left to take.
Once an employee exceeds their holiday entitlement, you’ll have to start taking these unpaid-for days out of their usual pay.
If you need help calculating your team’s holiday entitlement and pay, give us a call on 01454 300 999, or drop an email to email@example.com